Posts Tagged ‘Philip Morris’

On September 16, 2014, a jury in the U.S. District Court for the Middle District of Florida returned a verdict of $27,010,000.14 against Philip Morris USA on behalf of Judith Berger, who started smoking in 1958 at the age of 14. Clearly outraged by evidence of Philip Morris’ conduct in targeting children, the jury awarded over $20 million in punitive damages and added fourteen cents to the total. Judith Berger, as did her now-deceased twin sister, developed severe chronic obstructive pulmonary disease (COPD) from smoking.

Kenny Byrd, the lead trial counsel for Lieff Cabraser, which represented the plaintiff, was delighted with the verdict. “We are pleased that the jury held Philip Morris accountable for their calculated choice to target children, such as Mrs. Berger, to take up smoking. The addition of the 14 cents is just as meaningful as the $20 million before it. The jury understood our society should protect 14-year-olds, not target them for profits as the cigarette industry does.”

One of the pieces of evidence presented to the jury was a Philip Morris memo that said “today’s teenager is tomorrow’s regular customer.”

This case in federal court is one of thousands of “Engle Progeny” lawsuits that were filed following the Supreme Court of Florida’s 2006 ruling in Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006). The trials in these lawsuits, which began in February 2009, have resulted in plaintiff verdicts in approximately two-thirds of the 120 such trials that have reached a jury verdict. While most of these cases are being tried it state court, it is encouraging to see plaintiff victories occurring in federal court as well.

Not surprisingly, Philip Morris relied on its well-worn “personal responsibility” defense as its main attempt to evade accountability. Plaintiff co-counsel Lance Oliver of Motley Rice LLC, commented that, at trial, “Philip Morris attempted to lay all the blame on Mrs. Berger for choices she made as a kid. Thankfully, the jury saw through this and held Philip Morris accountable for its choices.”

When juries learn the details of outrageous tobacco industry behavior, the end result will be more verdicts – including punitive damages – comparable in size and scope as the one in this case. After the verdict, Mrs. Berger reacted as follows: “I am so grateful that the jury held Philip Morris accountable for its actions over the past 60 years. Before this lawsuit, I had no idea that the tobacco industry deliberately designed cigarettes to make them addictive and then conspired to lie to the public about their deadly effects. I fought this battle in part for my twin sister Josephine – may she rest in peace – who died from the same disease that will take my life in the next few years. I encourage anyone whose rights are violated by Philip Morris – or any corporation – to stand up, fight for justice and hold them accountable for their actions.”

Achieving justice and holding powerful corporations accountable for their wrongdoing: that’s what the Engle Progeny litigation is all about.

For seven years, cigarette companies have repeatedly claimed that the Florida Supreme Court’s decision in Engle v. Liggett, which relieved about 8,000 Florida cases of the need to prove general liability or that cigarette smoking causes disease, violated the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution. They repeatedly represented to industry analysts and shareholders that these key procedural advantages, which have helped plaintiffs in the trials held to date obtain verdicts against the cigarette manufacturers in two out of every three cases, ultimately would be wiped out as unconstitutional.

The original ruling was based on the long-established notion of res judicata, meaning that the matter had already been judged. The issues that the defendants wanted to re-litigate were already determined in a year-long class action trial in 1999.

Twice now, the cigarette companies have failed to get these important procedural advantages overturned by the U.S. Supreme Court and it appear that, for all intents and purposes, the industry’s uphill legal battle has just become considerably steeper in Florida.

Last November, the U.S. Supreme Court declined to review an appeal of another Engle progeny case, Clay v. RJ Reynolds Tobacco, which raised similar Due Process issues.

Today, about seven months after the Florida Supreme Court issued a decision upholding its 2006 Engle ruling in Philip Morris v. Douglas, the industry was again rebuffed by the nation’s highest court and may have exhausted ways of arguing that its Constitutional rights to due process have been denied in Florida.

Mark Gottlieb, Director of the Public Health Advocacy Institute, at Northeastern University School of Law in Boston noted that, “the cigarette companies have two choices left in Florida: either spend the next century continuing to lose around 65-70% of its cases or working to fairly settle them and bring some closure to those 8,000 or so victims who have been waiting more than 15 years for their day in court.”

Public Health Advocacy Institute’s Senior Attorney, Ed Sweda, said,”the tobacco companies’ long-repeated claim that the procedure for trying Engle Progeny cases violates their Due Process rights is now legally dead. The rights of the victims of these companies have been vindicated.”

In sharp contrast to the manner in which management at Reynolds American, Inc. conducted its annual meeting of shareholders a week earlier, Altria Group, Inc.’s Chairman and Chief Executive Officer Martin J. Barrington treated everyone at the May 16th meeting in Richmond, Virginia with courtesy and politeness.

Barrington began his presentation by commending the Altria Board of Directors’ “strong leadership and oversight.” He touted “strong results in 2012” and declared that the company’s “main brands did well.” Citing the company’s 9000 employees, Barrington praised the company for being a founding member of the Farm Labor Practices Group, supporting the arts and investing in communities. He admitted that “more needs to be done to discourage youth tobacco use” and, without giving any data showing how the program discourages youth tobacco use, praised Altria’s “We Card” program.

Barrington reported increased market share for Marlboro (in red, green, gold and black) cigarettes and progress for Black & Mild (tipped cigarillos) and the two major smokeless tobacco brands of Skoal and Copenhagen. He informed the audience that the company would introduce NuMark, a brand of e-cigarettes, in the second half of 2013.

Altria’s CEO also assured shareholders that the company’s outlook for 2013 is good; he noted that Altria had increased dividends six separate times since 2008. Also, Altria’s shareholder returns had increased by 84.2% during the span of 2008 to 2012.

On the topic of tobacco litigation, Barrington declared that the company had “success in managing litigation,” mentioned the ongoing Brown case in California dealing with light cigarettes and said that Altria has “strong defenses” as it continues to defend Engle Progeny cases in Florida.

A shareholder resolution, submitted by the Province of St. Joseph of the Capuchin Order in Milwaukee, dealt with the issue of disclosure of the company’s lobbying policies and practices. Specifically, it called on the Board of Directors to prepare a report, to be updated annually, for shareholders disclosing the following:

“Payments by Altria used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient;

“Altria’s membership in and payments to any tax-exempt organization that writes and endorses model legislation; and

“Description of the decision making process and oversight by management and the Board for making payments described in section 2 above.

Fr. Michael Crosby presented the resolution. He stressed that, while Altria has disclosed its payments to political candidates, it has kept largely secret the details about its spending on lobbying and making contributions to third-party organizations such as ALEC, the American Legislative Exchange Council. The resolution’s supporting statement pointed out that “Altria spent approximately $21.37 million in 2010 and 2011 on direct federal lobbying activities” but that these figures “do not include lobbying expenditures to influence legislation in states.”

This author then spoke in support of the “modest, pro-transparency resolution” and described the opposition to the resolution by Altria’s management as “short-sighted.” The company had described the reports required by the proposal as imposing “additional and unnecessary burdens and costs on the Company and would not be in the best interests of the Company and its shareholders.”

The results of preliminary voting were reported that the resolution was defeated with supporters garnering 21.82% of the votes cast.

During the question and answer session, to which thirty minutes were allotted, this author noted that Altria had suffered a major setback in mid-March when the Florida Supreme Court ruled 6-1 that the way dozens of Engle Progeny trials have been conducted since February 2009 does not violate the tobacco companies’ due process rights. I concluded my observations about this litigation with the question: Why shouldn’t shareholders believe tobacco company attorneys who have warned about “massive liability” with thousands of Engle Progeny cases still in the pipeline with “no end in sight,” rather than believing the optimistic assurances from management?

Barrington’s response was to acknowledge that litigation is a “challenge” and to refer shareholders to the company’s 10-Q report (PDF), which covers litigation in detail.

Fr. Crosby noted that heavy users of cigarettes are often those who are at the lowest rung of the economic ladder. “What steps will Altria Group take to reduce consumption of its tobacco products by the poor?” Rev. Crosby asked. Mr. Barrington simply cited the company’s programs to reduce youth consumption without addressing low-income adult smokers. Even after a follow-up question by Fr. Crosby, Barrington refused to commit any company resources to trying to discourage tobacco consumption among low-income adults.

After the 67-minute meeting had been adjourned, Altria Group, Inc., with its Marlboro brand having increased its market share of cigarettes by two-tenths of a percentage point in the first quarter of 2013, continued to conduct its business as it so usually does. During the course of the meeting, approximately 56 people died in the United States from smoking-caused diseases.

Florida smokers and their families who are suing tobacco companies won a resounding victory on March 14, 2013 when the Supreme Court of Florida upheld its landmark 2006 ruling in Engle v. Liggett Group, Inc., 945 So.2d 1246 (Fla. 2006).

By a vote of 6 to 1, Florida’s highest court ruled in favor of the plaintiff in Philip Morris USA, Inc., et al. v. Douglas, 2013 Fla. LEXIS 440, upholding a $2.5 million award in the death of Charlotte Douglas and explicitly rejecting industry arguments that the Florida Supreme Court’s ruling seven years ago violated the Due Process rights of the companies.

The Engle case originated as a class action and went to trial before a jury; that jury in Phase I of the trial found the defendant companies strictly liable, in that the cigarettes that the defendants manufactured and placed on the market “were defective in many ways including the fact that the cigarettes contained many carcinogens, nitrosamines, and other deleterious compounds such as carbon monoxide.” While the case ultimately was not allowed to proceed as a class action, the Supreme Court of Florida ruled in 2006 that the members of the class could file their own individual cases (so-called “Engle Progeny” cases) and proceed with those cases relying upon the jury’s Phase I findings of liability, including that smoking caused a variety of specific diseases, that nicotine in cigarettes is addictive, that the tobacco defendants placed cigarettes on the market that were defective and unreasonably dangerous and that all of the Engle defendants were negligent.

The tobacco companies have argued that, despite the fact that they vigorously presented a defense to these claims during the original Engle trial, applying the Phase I findings to the Engle Progeny trials violates their due process rights. Even though the R.J. Reynolds Tobacco Co. relied on this argument unsuccessfully in the Martin case a year ago, (see http://www.phaionline.org/2012/03/26/supreme-court-rejects-key-tobacco-industry-appeal-leaving-massive-liability-with-no-end-in-sight/ ), the companies tried again in Douglas. Commenting on the original Engle trial, the six-member majority in Douglas said: “As illustrated by hundreds of witnesses, thousands of documents and exhibits and tens of thousands of pages of testimony, the Engle defendants had notice and the opportunity to defend against all theories of liability for each of the class’s claims in the yearlong Phase I trial.”

That six-member majority also noted that the tobacco defendants “argue that the Phase I findings establish, at most, that some of their cigarette were defective for some unspecified reason and that they engaged in some, unspecified tortious conduct. This, they claim, requires reversal of the verdict for the plaintiff based on strict liability because the Douglas jury was not instructed (and did not find) a causal connection between a specific defect in the defendants’ cigarettes and the injuries alleged. We disagree and decline the defendants’ invitation to revisit our decision in Engle.”

The majority clearly recognized and emphatically rejected the industry’s fundamental argument. “At its core, the defendants’ due process argument is an attack on our decision in Engle to give the Phase I findings res judicata – as opposed to issue preclusion – effect in class members’ individual damages actions. However, res judicata is the proper term, and we decline the defendants’ invitation to rewrite Engle.”

The decision was bad news for the tobacco industry and its friends on Wall Street. Pro-industry analyst David J. Adelman of Morgan Stanley admitted that the ruling “was even more pro-plaintiff than we expected and will make it more difficult for the industry to successfully defend these claims.”

After the decision was released, Philip Morris USA announced that “it plans to seek further review” of the Douglas decision. That means yet another attempt to persuade the Supreme Court of the United States to consider the industry’s appeal that Engle Progeny trials that result in plaintiff verdicts somehow violate the companies’ due process rights. If the Supreme Court of the United States makes the same decision it made a year ago about an almost identical appeal (Martin), the answer to the tobacco companies will be a final “No.”

Soda companies’ PR campaigns are bad for health:

Health advocates need to organize strong public health campaigns to educate the public and policymakers about the dangers of both sugary beverages and the misleading industry corporate social responsibility campaigns that distract from their products’ health risks, according to US experts writing in this week’s PLoS Medicine.

In a Policy Forum article, the authors (media and public health experts from the Berkeley and Boston, USA) examined prominent campaigns from industry leaders PepsiCo and Coca-Cola, that, according to the authors, have embraced corporate social responsibility (CSR) with elaborate, expensive, and multinational campaigns.

The authors say that while soda companies may not face the level of social stigmatization or regulatory pressure that now confronts Big Tobacco, concern over soda and the obesity epidemic is growing.

In response to health concerns about their products, the authors argue that soda companies have launched comprehensive CSR initiatives sooner than did tobacco companies but that these campaigns echo the tobacco industry’s use of CSR as a means to focus responsibility on consumers rather than the corporation, bolster the companies’ and products’ popularity, and to prevent regulation.

However, unlike tobacco CSR campaigns, soda company CSR campaigns explicitly target young people and aim to increase sales.

The authors say: “It is clear that the soda CSR campaigns reinforce the idea that obesity is caused by customers’ “bad” behavior, diverting attention from soda’s contribution to rising obesity rates.” They continue: “For example, CSR campaigns that include the construction and upgrading of parks for youth who are at risk for diet-related illnesses keep the focus on physical activity, rather than on unhealthful foods and drinks. Such tactics redirect the responsibility for health outcomes from corporations onto its consumers, and externalize the negative effects of increased obesity to the public.”

The authors argue: “Emerging science on the addictiveness of sugar, especially when combined with the known addictive properties of caffeine found in many sugary beverages, should further heighten awareness of the product’s public health threat similar to the understanding about the addictiveness of tobacco products.”

They conclude: “Public health advocates must continue to monitor the CSR activities of soda companies, and remind the public and policymakers that, similar to Big Tobacco, soda industry CSR aims to position the companies, and their products, as socially acceptable rather than contributing to a social ill.”

This article is one in a PLoS Medicine series on Big Food that examines the activities and influence of the food and beverage industry in the health arena. The series runs for three weeks beginning 19 June 2012 and all articles will be collected at www.ploscollections.org/bigfood. Twitter hashtag #plosmedbigfood

Funding: This research was supported by the Healthy Eating Research program (http://www.healthyeatingresearch.org/) of the Robert Wood Johnson Foundation, grant #68240. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.

RICHMOND, VA. – Just eight days before the Altria Group, Inc. 2011 Annual Shareholders Meeting in this historic city, Altria Group’s former Chief Executive Officer, Louis Camilleri, complicated matters for his successor. At the Philip Morris International Annual Shareholders Meeting in New York City on May 11, 2011, Camilleri answered a question from a shareholder who is also a nurse who has treated many smokers with serious diseases. While admitting that smoking is addictive, Camilleri added the comment that “it is not that hard to quit” using tobacco products. That comment made international headlines after the Associated Press reported it.

So, when Altria Group’s Szymanczyk gave management’s report at the meeting in Richmond on May 19th, he specifically, on page 10 of his prepared remarksstated: “Because tobacco use is addictive and it can be very difficult to quit, our tobacco companies help connect adult tobacco consumers who have decided to quit with cessation information from public health authorities.”

During the question and answer session, shareholder Rev. Michael Crosby of the Interfaith Center for Corporate Responsibility and I both pressed Szymanczyk to state whether, as Altria Group’s CEO, he disagreed with Camilleri’s comment and, if so, why. Refusing to do so, he stated that “I would simply say that what I said is on our website. There is nothing new here.” The juxtaposition between the public statements of two tobacco executives just six days apart was the central focus of the Richmond Times-Dispatch article on the meeting.

I also pressed Szymanczyk on the issue of the ongoing Engle Progeny trials taking place in Florida. Noting that 30 out of 43 (now, as this report is written, 32 out of 46) such trials resulting in verdicts have seen jurors return plaintiff verdicts, I asked whether Altria Group, for the sake of its shareholders, would abandon its no-settlement policy regarding the thousands of Engle Progeny cases remaining throughout Florida. His response was simply to refer shareholders to the company’s 10Q form, which restates its standard policy of refusing to settle these cases.

Virginia shareholder Anne Morrow Donley, citing studies from March 2011 which showed that a fetus subjected to secondhand smoke is at a higher risk of stillbirth, lower birth weight and lower birth length , asked Szymanczyk whether he would publicly advise smokers not to smoke around women of child-bearing age. His response was to acknowledge that pregnant women should not be exposed to secondhand smoke, but he refused to broaden that recommendation to include women of child-bearing age.

Cathy Rowan, representing shareholder Trinity Group, noted Altria Group’s willingness to address concerns about implementing internally agreed upon code upholding the human rights of tobacco farm workers and about ensuring that the company’s suppliers are enforcing those rules. Altria Group’s cooperation with shareholders following a 2009 vote of shareholders where 25% supported a resolution to protect the human rights of farm workers stands in contrast to the rigid opposition by the management of Reynolds American, Inc. to similarly worded resolutions.

In his prepared remarks, Szymanczyk also bragged about Altria Group’s donations to various charitable and civic organizations, including the Boys and Girls Clubs, 4H, as well as the Virginia Museum of Fine Arts, the Kennedy center and the National gallery of Art. He boasted that “Altria made nearly $50 million in cash and in-kind corporate contributions to non-profit organizations” in 2010, without noting that the $50 million figure represented just 0.205% of the company’s net revenues ($24.363 billion) in 2010.

A shareholder resolution was offered, calling on the Board of Directors to move “to ensure that Altria stops the production of any of its tobacco products with characterizing flavoring added, as well as their distribution and marketing, unless and until it can be proven by independent and evidence-based research that such added characterizing flavors do not contribute significantly to youth initiation of tobacco use.” That resolution was defeated, with 97.5% of shares voting NO, with 2.5% voting YES.

A Jacksonville, Florida jury this week assessed $34 million in punitive damages against tobacco giants Philip Morris and R.J. Reynolds Tobacco Co. for their reprehensible misconduct in the case of Andy Allen v. R.J. Reynolds Tobacco Co., et al. This award followed a compensatory damages award of $6 million for the family of Patricia Allen, who died of chronic obstructive pulmonary disease (COPD) after having smoked for 36 years. Ms. Allen, who was born in 1948, started smoking in high school at a time when the tobacco companies were targeting teenage girls, according to Allen family attorney Keith Mitnick of Morgan & Morgan.

Edward L. Sweda, Jr., senior Attorney for the Tobacco Products Liability Project (TPLP), a project of the Public Health Advocacy Institute, based at Northeastern University School of Law in Boston, was delighted with the jury’s verdict. Noting that the jury “expressed appropriate and justifiable outrage at the reprehensible misconduct of these tobacco companies,” Sweda applauded the verdict, which was the third highest among the 30 plaintiff verdicts of the 43 Engle Progeny trials that have reached a verdict since February 2009.

It is also significant that this huge plaintiff victory occurred in Jacksonville, since approximately 4000 Engle Progeny cases are pending in state and federal court in Jacksonville.

TPLP Executive Director Mark Gottlieb said, “these trials stemming from the Engle class action suit of the 1990s disrupt business as usual for cigarette companies as juries continually find them liable at an astaunding rate.”

Class is certified; consumer protection law claims are reinstated since they establish “public benefit;” claims not barred by Minnesota’s 1998 settlement with tobacco companies or by 2009 federal legislation; claims not barred by statute of limitations.

The Minnesota Court of Appeals today issued a “resounding victory” for a class of Minnesota smokers of Marlboro Light cigarettes, according to Edward L. Sweda, Jr., Senior Attorney for the Tobacco Products Liability Project (TPLP), which is a project of the Public Health Advocacy Institute (PHAI), based at Northeastern University School of Law in Boston.

In a the case of Curtis, et al. v. Altria Group Inc. and Philip Morris, Inc., which was filed in 2001, the plaintiffs allege that Philip Morris engaged in a decades-long pattern of “false advertising, consumer fraud and deceptive trade practices regarding ‘light cigarettes in violation of Minnesota consumer-protection statutes.” As class certification in similar “light” cigarette lawsuits in Missouri, Massachusetts and New Hampshire has been upheld, the Minnesota Court of Appeals today affirmed the district court’s certification of the plaintiff class, noting that the district court “found that all members of the class have been similarly injured by Philip Morris’s alleged lengthy course of prohibited conduct. And the record supports this finding.”

Sweda also was pleased that the Court of Appeals rejected Philip Morris’s contention that Minnesota’s 1998 settlement with the major tobacco companies barred this lawsuit, which was brought on behalf of individual consumers, not the state of Minnesota. Importantly, the Court of Appeals ruled that the public-benefit requirement of the claims “is met in this case,… by the fact that Philip Morris made allegedly false representations to the general public, and we reject the argument that prior action by the attorney general deprives this lawsuit of public benefit.”

“Now that this important consumer-protection lawsuit can proceed, I look forward to it going to the trial in the near future,” Sweda concluded

A New Hampshire state court on Monday granted a motion to certify a class action in a lawsuit brought under that state’s Consumer Protection Act (CPA) in the case of Lawrence et al. v. Philip Morris, USA, Inc. The ruling makes New Hampshire the third state, after Missouri and Massachusetts, where such a class certification has been approved in a consumer-protection lawsuit against the tobacco industry’s light cigarettes scam.

Merrimack County Superior Court Judge Larry M. Smukler ruled that the plaintiffs had met all of the legal requirements for a class action under New Hampshire law. Referring to the lawsuit which was filed on March 29, 2002, Judge Smukler ruled that “in this case, common issues of law and fact predominate over individual issues.”
The plaintiffs are represented by Attorney Chuck Douglas, who can be reached at 603-224-1988.

Edward L. Sweda, Jr., Senior Attorney for the Tobacco Products Liability Project, (TPLP) welcomed the court’s ruling. “Just as courts in Missouri and Massachusetts have determined, a class action is an appropriate type of lawsuit to hold the tobacco companies accountable for their reprehensible misconduct in inflicting their light cigarette scam onto the public,” Sweda said.

In August 2006, U.S. District Judge Gladys Kessler ruled that the tobacco companies had violated federal anti-racketeering law. She noted that the tobacco industry’s light cigarette scam was one of the examples of misconduct that violated the Racketeer Influenced Corrupt Organizations (RICO) Act.

Results of a study released today by the National Cancer Institute suggests that heavy smokers may be able to reduce the chances of dying from lung cancer through low-dose helical computed tomography (CT) scans. In a randomized national trial of more than 53,000 current and former heavy smokers, CT scans led to outcomes with 20% fewer deaths from lung cancer.

This finding will likely play a very significant role in several class action lawsuits against Philip Morris which seek to have the company pay for periodic CT scans for heavy Marlboro smokers. One such case, Donovan v. Philip Morris, has been certified as a class action in federal court in Massachusetts. In 2009, the Massachusetts Supreme Judicial Court recognized medical monitoring as a valid cause of action (the Harvard Law Review discusses this decision here in a pdf).A similar case is awaiting a decision on class certification in New York: Caronia v. Philip Morris. The class in both cases are represented by the firm of Levy Phillips & Konigsberg.

The important thing about this and similar cases is that they are on behalf of people who are not yet suffering from lung cancer from smoking but who are at dramatically increased risk for the disease. Most health insurance plans will not cover CT scans, even for heavy smokers. Therefore, the people at the highest risk for lung cancer do not usually benefit from this diagnostic procedure. However, until today, there was not as clear a case to be made that CT scans would substantially benefit heavy smokers. Risks from these procedures include possible unnecessary radiation exposure and complications from further diagnostic procedures subsequent to an inconclusive scan.

The only case of this sort to go to trial did so twice (due to a mistrial) and resulted in a defense verdict. That case was Blankenship v. Philip Morris. The findings from the NCI study released today might very well have led to a different result there and in pending and future cases.